Nielsen Names Innovation Award Winners

Launching new products is difficult in the best of times, but winners of the 2012 Nielsen Breakthrough Innovation Award found ways to succeed during one the worst recessions in a generation. Winners of the award were announced at Nielsen’s Consumer 360 event in Hollywood, FL.

In contrast to innovation awards focused on “one-year wonders,” the Nielsen Breakthrough Innovation Award honors new products that succeed on multiple dimensions over a three year period. This is the first year Nielsen has presented the award.

“To successfully launch a new product in any economy is beating the odds, but to launch and sustain success during a recession is remarkable,” said Vicki Gardner, SVP, product innovation, Nielsen. “Breakthrough Innovation Award winners have unique bragging rights among CPG innovators.”

Nielsen analyzed more than 11,000 new products in the U.S. between 2008 and 2010. Of the products evaluated, only thirty-four products met award criteria. These products comprise less than 0.5% of all new product introductions during the period.

To be considered, honorees were expected to deliver on the following attributes:

2. Relevance: one -year sales of $25 million or greater in the channels Nielsen historically measures.

3. Category Impact: outperformance of the average product in its category on sales velocity, as measured by sales per distribution point.

4. Endurance: True success is measured over time. Winners were required to at least maintain or grow sales in year two, achieving at least 90 percent of year-one sales in year two.

Although the study was conducted at the product level, there were companies whose successes underscored an organization-wide commitment to ongoing product innovation. Procter & Gamble led the way with five initiatives making the list. Anheuser-Busch, Coca-Cola, Johnson & Johnson, Kellogg, Nestlé, PepsiCo, and Unilever each had two initiatives.

Winners followed multiple paths, but shared common themes. One trait shared was the understanding that getting it right the first time is neither likely nor important. Winners built a test-and-refine process to build in iterations before launch. Also, Breakthrough Innovation Leaders followed one of two activation models:

Sprinters – products that race out of the gate in year one, then allow momentum to sustain in-market performance in year two

Marathoners – products that deliberately start out at a slower pace and build on their success in subsequent years

The typical Sprinter profile is a larger company not straying far from the existing portfolio. They price at a premium, are aggressive with in-market trial and average nearly $50 million in one-year traditional advertising spend. After racing out of the gate, Sprinters take their foot off the accelerator in subsequent years, shifting focus from growth to profitability.

Marathoners, often smaller companies, spend one-third as much on advertising in year one, but build support in year two, realizing an average of 80 percent growth in the second year.